Source 2 got released today in an alpha phase. For free for dota2 Dota 2 Workshop Tools - Valve Developer Community
Their site is down.
How is this Source engine 2 when its a tool kit ingame to make custom game modes?
This is pure speculation for the sake of it. Nothing more and nothing less. I mean, all of this, just because some files were renamed with the number ‘2’ tacked on at the end? Jeez.
However, in response to how this affects Unreal Engine 4? I don’t think that it does.
Ok, So a bit of background about source engine 1 and then we can move on to how we know it is source 2 
So -
There was a leak back in January of 2014 with some file names which appeared in this release of the DOTA 2 Mod tool kit.
Leak Info and Current File Structure
With that said - This is not just a simple tools release allot of new file formats have been added (.FBX is among them) as well as new tools such as the re-engineered hammer editor. Hammer is now real time with WYSIWYG functionality. DirectX 11 Support has been added. Remember Source Engine used DX9 and Some DX10 functions.
It uses QT Framework which you can find in the about section when you open the editor. Once again another major engineering feat to pull off.
Given that this is an alpha things will improve drastically tool wise BUT the ball is still in Epics court. They have blueprint and allot of functionality that source is missing or hiding at the moment.
With that Said - I want to see what move valve will make at GamesCom since they will be there.
Until then I await Half Life 3
Umm… maybe i am missing something on their site but it doesn’t affect UE4 in any way. It’s a toolkit for custom mods for dota2??? It serves a different purpose and cannot compare with an engine for building custom stand-alone games. Like I said, maybe I am missing something?
You are not missing anything. It is the Source 2 Engine but tuned for DOTA 2 Map and Gamemode creation.
However I do think that Valve is going to try and compete with Unreal 4 in the engine department for Indies.
This is why I say that - “The future of game development is opensource.”](Gabe Newell: "Linux and open source are the future of gaming" | PC Gamer) - Gabe Newell.
It’s really good as of now. Lacks blueprints and I think it uses prebaked lighting not sure on this one. They removed the brushes thank god!
Anyone know if you can just import models right from within Hammer? Or do you still have to do that nonsense with writing a QC and compiling?
Hammer may have gotten an overhaul with Source 2 but if the pipeline for models/textures is still as terrible as Source 1, I can safely say I’ll be ignoring Source 2. I say that as someone who spent years working with Source 1 and put up with its nonsense - never again.
Just import with .fbx and other formats. It is really painless now.